Without admitting any wrongdoing, Houston-based BP Energy Co. on Friday entered into a stipulation and consent deal with FERC staff to resolve charges that the energy company manipulated prices for electricity destined for the California market.
Under the FERC-approved settlement with the agency’s Office of Markets, Tariffs and Rates, BP Energy agreed to pay $3 million to low-income energy assistance programs in California and Arizona within 30 days, and to subject its sales of electricity in western markets to much closer Commission scrutiny over the next six-month period [PA02-1-011, EL03-60].
BP Energy got off fairly lightly. In late March, FERC issued an order against the company requiring it to show cause why it should not be stripped of its license to sell power at unregulated rates (see Daily GPI, March 27). The Commission also threatened Reliant Energy Services Inc. and several Enron-affiliated companies with similar action, but the agency has not ruled on those cases yet.
The consent deal calls for BP Energy to submit monthly reports to FERC’s Office of Market Oversight and Investigations (OMOI) on all completed electricity sales in the Western Electricity Coordinating Council (WECC) on a transaction-by-transaction basis for six months. OMOI may investigate BP Energy’s trading practices within 30 days of receiving a monthly report, it said.
The Houston company also agreed to have its compliance office conduct random reviews of taped conversations between its power traders and market participants involving transactions in the U.S. portion of the WECC, and to provide copies of trading tapes if requested by OMOI during the six-month period.
The agreement resolves allegations that a rogue BP Energy trader, in concert with a Reliant Energy trader, manipulated prices for electricity delivered to Palo Verde, a key Arizona trading hub. The Commission said it had copies of phone conversations and transcripts that confirmed the charges.
In one recorded telephone conversation, “the BP trader goes on to explain that he is trying to move the market price up to $43.10 but no one will buy at that price, so he needs the Reliant trader to ‘lift his offer’ in order to increase the price,” the FERC show-cause order said
Â©Copyright 2003 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.
© 2023 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |